TITLE
Recommendation to authorize City Manager to execute agreements between the City of Long Beach and Paramount Petroleum Corporation for the Crude Oil Sales Contracts: Long Beach Unit, 7 percent and
5-1/2 percent Segments beginning on March 1, 2006, and concluding on September 1, 2007. (Districts 2,3)
DISCUSSION
On March 8 , 2005 , a bid opening was conducted for the subject Crude Oil Sales Contracts.
Paramount Petroleum Corporation was the highest bidder for the 7 Percent Segment with a
bonus bid of $0. 378 per barrel over the base price. Paramount Petroleum Corporation was
also the highest bidder for the 5- 1/2 Percent Segment with a bonus bid of $0.279 per barrel
over the base price. The base price is equal to the arithmetic average of the prices posted
by ConocoPhillips, ChevronTexaco, ExxonMobil Corporation , and Shell Trading US in the
Wilmington , Long Beach (Signal Hill), Huntington Beach , Inglewood , and Midway Sunset
oil fields. The 7 Percent Segment consists of approximately 2 000 barrels per day of oil
and the 5- 1/2 Percent Segment consists of approximately 1 600 barrels per day of oil. The
length of term of each contract will be 18 months. The contracts begin on March 1 , 2006
and conclude on September 1 2007.
This item was reviewed by Deputy City Attorney J. Charles Parkin on April 13 , 2005 and
Budget Management Officer David Wodynski on April 19 , 2005.
TIMING CONSIDERATIONS
City Council Action on this matter is requested on May 3 , 2005 to expedite the issuance of
these agreements.
FISCAL IMPACT
In accordance with Chapter 138 , California Legislature , 1964 First Extraordinary Session
and Chapter 941 , proceeds from the base price of the sell-off of Tidelands oil in Tract I of
the Long Beach Unit (LBU) are included in the allocation of revenues to the State of
California , Oxy Long Beach , Inc, and the City of Long Beach. The bonus received from the
5 % percent and the 7 percent sell-off is allocated to the State of California ...
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